Restaurant owners typically have their hands full heading into the holidays.
This year, they’ve got one more thing to worry about courtesy of the federal government: keeping up with an overtime rule that has become a political football.
Restaurants and other kinds of businesses were just getting ready to comply with an Obama administration rule extending overtime pay to 4.2 million workers when a federal judge in Texas issued a preliminary injunction Tuesday putting the change on hold for now.
The proposed mandate from the U.S. Labor Department had been set to take effect on Dec. 1 and would have extended overtime protection to salaried employees making less than $47,476 a year.
The pending change had employers in a range of industries, including restaurants, scrambling to decide whether to raise the salaries of affected employees to the new threshold, start paying them overtime or limit their hours to 40 a week.
Carl Sobocinski, owner of eight restaurants in downtown Greenville, had estimated that the change would have increased his labor costs by $70,000 to $80,000 a year.
Wednesday, Sobocinski said he was prepared to comply with the new rule if it is ultimately upheld and will conduct business as usual if it’s permanently struck down, except for a few changes he already made to comply.
Sobocinski said he was glad to hear about the injunction delaying what he called an “anti-business law.”
“We’re in favor of the court ruling and hope that it stays,” he said.
As for holiday business, Sobocinski said he was “slammed.”
With the Dow Jones industrial average stock index above 19,000, people are optimistic and traveling for the holidays, he said.
The Labor Department had estimated that the change would put an extra $1.2 billion a year into workers’ pockets.
Tuesday’s court ruling came in a case filed by 21 states, including South Carolina.
The U.S. District Court for the Eastern District of Texas found the Labor Department had exceeded its authority in ordering the change. The preliminary ruling applies nationwide until the court can issue a permanent opinion.
The National Restaurant Association hailed the decision as a “critical step in what we hope will be a positive outcome,” but urged its members to continue getting ready to comply with the proposed rule, even as the Trump administration gets ready to take office.
“While this is a positive step forward, [the decision] does not delay the overtime rule indefinitely,” the association said in a statement. “Additional legal actions or a final decision by the court in favor of the Department of Labor could result in the overtime rule taking effect. Therefore, the association once again reminds our members that it is important to take the necessary steps to be ready to comply.”